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Special report:

T he National Commission on Restructuring the Internal
Revenue Service published a study calling for significant changes in
the way the IRS is governed. The report, published on June 25,
recommends that the overall responsibility for executive branch
management of the IRS be placed in the hands of a new, independent
board of directors.

However, the proposal, one of 50 recommendations in the report,
would continue to give the Treasury Department full control of tax
policy. The board, to be made up of five members from the private
sector and two members from the executive branch, would direct the
IRSs long-term strategy, appoint senior management and hold it
accountable.

The president would appoint the board members, who would be
confirmed by the Senate. Board members would review and approve
business and operational plans, including plans for modernizing the
computer system, outsourcing and training. They also would appoint the
commissioner and review his or her IRS budget recommendations.

Senator to Push Internet Bill

S enate Commerce Committee Chairman John McCain
(R-Ariz.) promised swift action on a bill that would halt the
imposition of new taxes on Internet services and products. The
Internet Tax Freedom Act (S 442 and HR 1054) (see JofA,
June97), which the Clinton administration supports, would
direct businesses and consumer groups, state and local
governments and the federal government to work together to
develop policy recommendations for Congress on interstate
taxation of electronic commerce. It also would direct the
executive branch to seek an international agreement making the
Internet a duty-free zone.

Some 20 jurisdictions, including the District of Columbia,
impose one or more taxes on electronic commerce. Senate
sponsor Ron Wyden (D-Ore.) said many of those jurisdictions
include Internet access and services under existing tax
regimes, such as telecommunications or sales and use taxes.

Rossotti has managed the consulting firm since 1970. AMS,
with approximately 7,000 employees, had earnings of over $800 million
in 1996; it specializes in consulting services for financial
institutions, telecommunications companies, federal agencies, state
and local governments and utilities companies. Previously, Rossotti
had been principal deputy assistant secretary in the Defense
Department Office of Systems Analysis. He has a bachelor of arts
degree from Georgetown University and a masters degree in business
administration from Harvard Business School.

Rossotti would succeed Margaret Milner Richardson, who left the IRS
in May, and Michael P. Dolan, acting commissioner.

Most
Recent Stats of the Past The
Internal Revenue Service released its 1994 Corporation
Source Book , which includes aggregate statistics on
assets, liabilities, receipts, deductions, tax and tax credits
presented by industry groups. Printed copies can be purchased
for $175, and floppy disk and magnetic tape copies are
available for $1,500. A list of industry classifications and
tape specifications is available without charge by calling the
IRS at 202-874-0410.

Bank Wants Personal Treatment
The
American Bankers Association (ABA) urged the Organization
for Economic Cooperation and Development (OECD) to adopt
international tax policies that accept taxpayers own
valuations of transactions. The ABA was commenting on the
OECDs discussion draft on the global trading of innovative
instruments. The ABA said that, without such analysis,
"each tax authority would be free to apply its own
version of economic reality, which could lead to
disagreements and double taxation."

Congressional Revenue Smell Test?
Senate small business committee chairman Christopher Bond
(R-Mo.) and Senator Richard Shelby (R-Ala.) introduced
legislation that would give Congress the ability to review
any regulatory action that increases revenue. Although the
Bond-Shelby proposal is not aimed specifically at the IRS,
it is a response to a controversial IRS proposed regulation
(REG-209824-96) that would have the effect of imposing
self-employment taxes on the investment income of taxpayers
disqualified as limited partners in limited liability
companies.